The U. S. Men’s Shaving Gel Market: A Competitive Profile1

This paper is a part of twelve studies that have tried to analyze the competitive profile of U.S. consumer markets: Men’s Shaving Gel, Beer, Shampoo, Shredded/Grated Cheese, Refrigerated Orange Juice, Men’s Razor-Blades, Women’s Razor-Blades, Toothpaste, Canned Soup, Coffee, Potato Chips, and Alkaline AA Battery.

Porter associates high market share with cost leadership strategy which is based on the idea of competing on a price that is lower than that of the competition. However, customer-perceived quality—not low cost—should be the underpinning of competitive strategy, because it is far more vital to long-term competitive position and profitability than any other factor. So, a superior alternative is to offer better quality vs. the competition.

In most consumer markets a business seeking market share leadership should try to serve the middle class by competing in the mid-price segment; and offering quality better than that of the competition: at a price somewhat higher to signify an image of quality, and to ensure that the strategy is both profitable and sustainable in the long run.

Quality, however, is a complex concept consumers generally find difficult to understand. So, they often use relative price, and a brand’s reputation, as a symbol of quality.

The total sales of the U.S. Men’s Gel market in 2008 were $ 131 million. We found that the 7-oz Gel was the most popular size with 2008 sales of $116 million. So, we have focused our analysis on this package.

Using Hierarchical Cluster Analysis, we tested two hypotheses: (1) That the market leader is likely to compete in the mid-price segment, and that (2) Its unit price is likely to be higher than that of the nearest competition.

The results supported both Hypothesis I and II for 2008 and 2007. Both the market leader Edge and the runner-up Gillette Series were members of the mid-price segment. Furthermore, the unit price of Edge was higher than that of Gillette Series, as we have hypothesized.

We found that relative price was a strategic variable, as hypothesized.

We also discovered five strategic groups in the industry.